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Table of Contents

Lead Story

Fine-tune for year-end bonanza


Industry Update

Industry Update

Bill Me Later welcomes eBay – will you?

Duel in the Big Apple

Regulation under the radar

European interchange battle escalates

Gift card hijacker gets 10 years


Higher risks mean higher rewards

Ultimate distribution with Ultimate Game Card

The indomitable holiday spirit

Industry Leader

Diana Mehochko –
Returning to industry roots


Making cents of financial turbulence

Patti Murphy
The Takoma Group

Positively cash advance

Mike Landau


Street SmartsSM:
Tough times pass, tough agents last

Jason Felts
Advanced Merchant Services

Drip for success

Nancy Drexler
SignaPay Ltd.

POS goes hybrid

Dale S. Laszig
DSL Direct LLC

Get organized - Part 1

Vicki M. Daughdrill
Small Business Resources LLC

The economy and your portfolio

Lane Gordon

Company Profile

Veratad Technologies LLC

New Products

Manage merchants with inventive POS

InventTrak v3.0
InvenTrak Point of Sale Products

Ignite revenue with SMS spark

SMS Gift Card Portal
SparkBase and Inspiron Logistics Corp.


Hi, um ... what's your name again?



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

October 27, 2008  •  Issue 08:10:02

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Bill Me Later welcomes eBay – will you?

EBay Inc., parent company of online debit payment giant PayPal Inc., is set to acquire credit-based online payment provider Bill Me Later Inc. for $945 million. The reported goal of the acquisition is to help eBay increase revenue and expand its footprint into the brick-and-mortar world. But does this acquisition mean increased competition for ISOs and merchant level salespeople?

Theodore Svoronos, Certified e-Commerce Consultant for Irvine, Calif.-based Group ISO, said credit cards are the main crux of the payments space, but he sees Bill Me Later as a viable secondary payment methodology. "The upside for us, in the short term, is minimal. But this could create an unexpected competition that will force acquirers to change some of their marketing strategies and tactics."

Matt McDowell, Vice President of Merchant Services and Sales for CardinalCommerce Corp. said Bill Me Later is tied into 60 percent of the 500 largest e-commerce merchants, making it a significant player in the alternative payment market. But eBay could use ISOs to sell the Bill Me Later service to brick-and-mortar merchants.

"It would make sense for them to ultimately go through an ISO channel because we have the feet on the street," McDowell said.

CardinalCommerce, which facilitates the processing of PayPal and Bill Me Later transactions, has a software pipeline that sends Bill Me Later transactions to processors Fifth Third Bancorp, First Data Corp. and Chase Paymentech LLC.

Acquirers left behind

Victor Newsom, Senior Vice President of Operations for prepaid processor eCommLink Inc., said it is inevitable that Bill Me Later, with eBay's backing, will implement value added consumer and credit services.

"The Bill Me Later solution is one way of increasing throughput and adding value to their customer base, so you're going to start seeing more effect and impact on the acquiring side," Newsom said. "The marketplace is more fluid, and acquirers should look at more nontraditional methods of expanding their reach. Simply having a relationship with the retailer isn't the solution because it's simply no longer the only game in town."

Newsom feels acquirers can now go on the offensive and expand their reach in ways that were not possible in recent years. "There is a threat because the rules have changed," he said. "Acquirers have an opportunity to go into the issuing space, cut costs and improve their own business models. The folks who don't change what they do today are the ones who are going to get hurt the worst."

Newsom believes there is nothing to stop acquirers from forging their own relationships with Bill Me Later, creating their own card products and cutting direct deals with payment institutions.

Outside looking in

"Acquirers just need to think outside the box," Newsom added. "The value here is in information, the value of knowing who you are servicing. Acquirers are in a unique position to leverage those opportunities. They know their demographics and are closer to the end cardholder, and you would think [acquirers] are in the best position to create a new product or take advantage of a new opportunity."

But Svoronos noted that ISOs have leverage in the relationships they have already developed with banks and merchants.

"Consumers feel more comfortable when they are offered alternative payment options, and this bolsters spending," Svoronos said. "I don't think [eBay] will ever take the market share that we have. New merchants may start off with a PayPal or Bill Me Later, but when they grow to that next tier and start making money, they're going to need a merchant account through an ISO channel."

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | USAePay | Impact Paysystems | Board Studios